A fusion startup backed by Jeff Bezos just raised another $65 million, signaling that investors are still betting on this 'Holy Grail' technology

Fusion energy startup General Fusion just raised another $65 million. The money will go towards constructing a demonstration power plant to test out its technology. Here, an early-stage prototype of the company's unique piston technology, which is designed to compress hydrogen plasma and spur fusion.General Fusion

General Fusion, an energy startup backed by Jeff Bezos, just
closed a $65 million funding round, led by the Singapore-based
investment firm Temasek. The company plans to use the funds to
build a demonstration power plant to test its fusion technology
on a commercial scale.

General Fusion is among a handful of fusion startups that
have been backed by prominent venture capital funds, such as Bill
Gates' Breakthrough Energy Ventures. If successfully
commercialized, fusion could provide a clean source of energy
without many of the drawbacks of nuclear fission, like the
production of hazardous waste.

Fusion is a promising technology, but inventing a power plant
that produces more energy than it uses is incredibly costly.
Experts worry that there's not enough money to commercialize the
technology in the near term. Even with ramped-up public funding,
commercial fusion won't be possible until the late 2030s at best,
they say.

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A fusion energy startup backed by Jeff Bezos just closed a $65
million funding round, led by the massive Singapore-based
investment firm, Temasek.

The company, General Fusion, will use the funds to start building
a demonstration power plant to test its fusion technology on a
commercially-relevant scale.

"This represents the first effort to build a power-plant scale,
power-plant relevant prototype fusion machine," General Fusion's
CEO Christofer Mowry told Business Insider. "This is really the
springboard for General Fusion and, frankly, for a community of
private fusion companies around the world. This is what I call
the SpaceX moment for fusion."

General Fusion is among a handful of fusion startups attracting
high-profile investors in recent years. Commonwealth Fusion
Systems, a competitor backed by a Bill Gates-led fund, closed a
$115 million round in June, and Alphabet-backed TAE Technologies
raised $375 million in 2016, according to data from PitchBook.

Private investors are betting big because the stakes are so high.
If successfully commercialized, fusion could provide a powerful
source of clean energy without many of the drawbacks of nuclear
fission (typically referred to as "nuclear energy"), such as the
production of hazardous waste.

But experts say that achieving commercialization is still a long
way off, not to mention, incredibly expensive.

Creating a commercial device that generates a net gain in energy
- meaning, it emits more energy than it takes to operate - will
likely require tens of billions of dollars; $65 million is just a
drop in the bucket. That's one reason why many private investors
have been reluctant to fund fusion startups. These companies are
still a better fit for public funding, they say.

"It's pretty daunting," said Tom Blum, an investor, and member of
Clean Energy Venture Group. "That's got to be funded by federal
money and a few billionaires because nobody else can write those
checks."

General Fusion's plasma injector, which is one part of the demonstration plant the company is planning to build.General Fusion

A source of clean energy

If you're unfamiliar with fusion energy, you're not alone.

At a basic level, fusion is the process that powers the sun: The
nuclei of hydrogen atoms crash into each under extreme heat and
pressure, causing them to fuse together and form the nuclei of
another, heavier element - helium. This results in a loss of mass
and a huge surplus of energy.

That energy is mostly clean and relatively safe, compared to
nuclear fission. And so for decades, scientists have been trying
to find a commercially feasible way to fuse hydrogen atoms here
on Earth.

The most common approach involves using two forms of hydrogen
atoms, called deuterium and tritium. They fuse together
relatively easily, but the process still requires a tremendous
amount of pressure - and a temperature as high as 150 million
degrees Celsius.

To achieve this, most companies and public labs use an obscure
device, shaped like a hollow bagel, called a tokamak. Inside a
typical tokamak is a superheated hydrogen gas containing
deuterium and tritium that's surrounded by superconducting
magnets. Those magnets heat and compress the gas until fusion
occurs.

General Fusion's approach is innovative but risky,
experts say

What General Fusion is doing is slightly different. Like the more
traditional tokamak, the startup uses a magnetic field to contain
the hydrogen gas inside a hollow vessel. But in this case, the
vessel is spherical and the hydrogen gas is surrounded by a
spinning vortex of liquid metal.

It gets more extreme: The outside of the sphere is surrounded by
hundreds of pistons that repeatedly strike the liquid metal,
pushing it inward to heat and compress the plasma. If all goes as
planned, that compression spurs fusion.

"Our approach to fusion is something akin to a fusion version of
a diesel engine," Mowry said. "The process requires that these
pistons reliably, repeatedly, and at very high precision move in
a very controlled fashion."

General Fusion has already tested this approach, Mowry says.

"We have built full-scale pistons," he said. "We have proven the
performance required for this demonstration plant to work."

But like many of the other fusion technologies, it hasn't been
tested on a commercially relevant scale. According to Malcolm
Handley, an expert on fusion commercialization at the Advanced
Research Projects Agency-Energy, known as ARPA-E, General
Fusion's approach is innovative - but challenging.

"The big challenge to what they're doing is that it involves on
the order of 300 pistons that all need to fire at once within a
pretty short amount of time in order for these conditions to
actually occur," he said. "The worst part of it is that you don't
really get to do that experiment until you've built 300 pistons,
which takes a whole lot of money."

Now, General Fusion says it's well on its way to finding that
financial support.

What it will take for General Fusion to prove its
technology

General Fusion will use the injection of funds to construct a
demonstration plant, where it can test its technology at a large
scale. The finished plant would have a capacity on the order of
100 megawatts (an average onshore wind turbine is 2.5 to 3
megawatts), Mowry says, though the company isn't sure yet where
it will be built.

The demonstration plant will test to see if General Fusion's
technology can be commercialized - that is, if it can produce
gain, or more energy than what it requires as an input. It will
also confront technological challenges that Mowry says have
dragged the industry for years.

"There's historically been a problem with material degradation,"
Mowry said. "In a lot of approaches to fusion, the machine itself
gets degraded pretty quickly. This is really proving out at a
power-plant-relevant scale that the approach we have is practical
and works."

The startup plans to complete the project in the next 5 1/2
years, Mowry says. But hitting that deadline will likely depend
on acquiring more than $300 million in support, and the company
is only about a third of the way there.

Microsoft co-founder and philanthropist Bill Gates spearheads Breakthrough Energy Ventures, one of the many new venture funds that supports fusion technology.REUTERS/Rick Wilking

Who's funding fusion?

Until recently, fusion technology has been in the hands of
massive research institutions, such as ITER - a gargantuan fusion
project, with an estimated
$25 billion price tag. These organizations have mostly
focused on achieving net gain and proving the science works.

Now that we know it does, what remains is commercialization. And
at least a dozen private companies are hoping to be the first to
get there - including General Fusion.

The challenge is that, even with sound science, fusion is a hard
sell to private investors. It's capital intensive and
slow-moving, and there's a lot of de-risking left to do. That
means it's still a relatively poor fit for VC funding, according
to Handley, who ran a fusion-focused venture fund before joining
ARPA-E.

"The caveat I think is that most of the companies at the moment
are very small and very early and going after private funding
because they perceive they cannot get the money publicly," he
said. "But they're actually better fits for public funding."

That might be one big benefit for General Fusion - it's attracted
a lot of both private and public money. The question is whether
these sources will continue to serve up funds for fusion. Mowry
says they will.

"Large government programs and governments themselves are
beginning to pivot away from just purely science programs to
investing either directly or indirectly in programs that seek to
commercialize the technology," he said. "I think that's just
another great signpost that the collective community sees the
fact that it's really fusion's time now."

But not everyone agrees. While many experts are confident that
fusion will play a large role in the future of energy, they say
the technology just isn't there yet.

"Fusion is the Holy Grail," Louis Brasington, a researcher at the
analytics firm Cleantech Group, said. "What we find is the
progress is very slow. At the moment there are still a lot of
issues. "

To overcome them, Handley says that public institutions need to
step up.

"My current belief is that the federal government and other
national governments need to be doing more to support these
companies at this stage," he said. "America needs to wake up and
say this might very well be the energy source of the future."